Economic Development Bonding Program

ARRA: Connecticut Recovery Zone Economic Development Bonding Program: $90 Million

HARBOR POINT – 12/09- $16MM FROM FAIRFILED COUNTY’S $26.837MM ALLOCATION
NORWALK – 6/10- $6MM FROM FAIRFIELD COUNTY’S REMAINING $10.837MM ALLOCATION
WATERBURY- 7/10- $18.791MM- FROM NEW HAVEN COUNTY’S ALLOCATION
TOTAL RZEDB USED TO DATE: $40.791MM OUT OF STATE’S $90MM ALLOCATION

About the Program
As part of the federal government’s economic stimulus efforts, Connecticut is receiving authorization to issue up to $90 million in bonds through the Federal American Recovery and Reinvestment Act of 2009 (ARRA) for shovel-ready governmental purpose construction projects within “Recovery Zones” to be designated throughout the state. The $90M allocated to the state is divided between the five major cities and eight counties in both 2009 and 2010.  The issuer receives a 45% direct pay interest subsidy on the taxable bonds which must be used for a “Qualified Economic Purpose”.

CT Economic Recovery Zone Economic Development Facility Bond Program will be jointly administered by CDA and DECD.  Program awards of bonding allocation will be on a competitive, ongoing basis by CDA based on criteria established by DECD and CDA to support shovel-ready governmental purpose construction projects that will grow the state’s economy including:
    1. Located in a designated Recovery Zone
    2. Municipal infrastructure aid
    3. Economic development
        a. Projected job creation
        b. Projected tax generation
        c. Anticipated community benefits
    4. Compatibility with state responsible growth strategies
    5. Brownfield reuse
    6. Transit-oriented development  
    7. Project readiness to proceed

Recovery Zone Economic Development Bonds (RZEDB) – The federal government has allocated a total of $90 million to the State of Connecticut: approximately $72 million to counties and $17 million to the five major cities.  The Bonds would be taxable governmental obligations with a 45% direct pay interest subsidy from the federal government back to the issuer.  The utilization of ARRA resource will require all parties to abide with certain requirements and conditions, such as prevailing wage requirements.

Designation of Economic Recovery Zones:
The federal statute requires states to designate economic recovery zones.  It is proposed that CT utilize those programs that currently exist: federal entitlement communities, enterprise zone communities and public investment communities (see Table 1 below).

Awarding the Funds:
Bond proceeds need to be initially allocated according to the geographic parameters of Table 1, subject to reallocation.  Given the current economic situation, one potentially viable use will be those for which TIF (tax incremental financing) has already been authorized by CDA, such as a project in a special taxing district.  The issue would become self-sustaining through the assignment of a needed portion of taxes collected.  Another potential use is for capital projects the state is advancing over the next two years to achieve some of the interest savings.  As a result, projects will need to meet the following preliminary criteria prior to proceeding with a full review:

1.      Demonstrate that the project meets federal program and tax criteria.
2.      Demonstrate that the project funding will be in place and the bonds sold by December 31, 2010.
3.      The project must be in eligible areas designated as recovery zones. 

1 Ansonia 2 Ashford 3 Beacon Falls 4 Bloomfield 5 Bridgeport 6 Bristol 7 Brooklyn 8 Canterbury 9 Chaplin 10 Colchester 11 Danbury 12 Derby 13 East Hampton 14 East Hartford 15 East Haven 16 East Windsor 17 Enfield 18 Fairfield 19 Greenwich 20 Griswold 21 Groton 22 Hamden 23 Hampton 24 Hartford 25 Killingly 26 Lisbon 27 Manchester 28 Meriden 29 Middletown 30 Milford 31 Naugatuck

32 New Britain 33 New Haven 34 New London 35 North Canaan 36 Norwalk 37 Norwich 38 Plainfield 39 Plainville 40 Plymouth 41 Portland 42 Putnam 43 Seymour 44 Southington 45 Sprague 46 Stafford 47 Stamford 48 Sterling 49 Stratford 50 Thomaston 51 Thompson 52 Torrington 53 Vernon 54 Voluntown 55 Waterbury 56 West Hartford 57 West Haven 58 Wethersfield 59 Winchester 60 Windham 61 Windsor 62 Wolcott

RZEDB Allocations Made:
    $16,000,000 to Harbor Point Infrastructure Improvement District approved by the CDA Board on December 16, 2009
    $6,000,000 to the City of Norwalk approved by the CDA Board on February 24, 2010

Contact:
Karin A. Lawrence
860.258.7814
Applications:
Connecticut Recovery Bond Program Application 
Please submit four copies of your application: two copies of the application to each of

Karin Lawrence Connecticut Development Authority 999 West Street, Rocky Hill, CT 06067 Tel: (860) 258-7814 Email: karin.lawrence@ctcda.com

Peter Simmons Department of Community and Economic Development 505 Hudson Street, Hartford, CT 06106 Tel: (860) 270-8149 Email: peter.simmons@ct.gov

For Additional Information on all CDA Programs Contact CDA by email